Written by Richard Parker
Retirement is a period most of us can’t wait to get to, but the journey can be bumpy. In fact, the journey can throw up more than a few roadblocks – all of which can contribute to a difficult retirement life.
Mistakes happen through the course of life and to suggest that the decades leading up to retirement will be void of them would be unrealistic. However, today is all about pinpointing some of the most common ones which can leave people’s retirement dreams in tatters.
You don’t think of the big, retirement picture
One of the biggest mistakes we see across the retirement spectrum is people exclusively focused on the here and now. They have set expectations and are under the impression things will never change.
Well, here’s a newsflash, they turn on their head. The good news is some will be eradicated (with the mortgage usually falling into such a category), but by the same token you’ll have some new ones to deal with. For example, as difficult as the subject might be, you should look at how to pay for potential care as you get older, and even funeral fees. It’s the unplanned for extras like this which add up and distort your mortgage-free retirement living.
You don’t max out your pension
We are taught from a young age that there is no such thing as free money. Well, when it comes to pensions, we disagree.
Most companies will match your pension contributions. Instead of investing the bare minimum, invest a little more so your company will do the same. This is money that you can accumulate for years to come and with the power of compound interest, this can be invaluable.
You don’t invest
Following on from the previous point, you need to think about investing. We are by no means suggesting you start to act like Warren Buffett, but at least think broader about your financial plans.
Most think they are doing the right thing by saving money and this is absolutely a good start. However, the interest rates on savings accounts are low, and these accounts will be dwarfed by long-term funds which tend to yield much better returns. Is there an element of risk? There always is. If you turn to a reputable financial planner, or even conduct your own due diligence, you can mitigate these risks somewhat and provide yourself with a much stronger retirement nest egg.
You only think about money
So far, we’ve only spoken about money. In fact, when it comes to retirement, most people do just plan for the financial impact.
As we have already noted, your financial situation will turn on its head during this period of your life. By the same token, it is important not to ignore other areas of your life. As well as your finances, your routine is going to be completely overridden and you’ll suddenly need to fill your time. As welcome as it might initially sound, some people struggle immensely with this and find it really difficult to adjust to a life of disposable time.